NZ dollar trades sideways, shrugs off historical jobs data

The kiwi was trading at 60.54 US cents at 5pm. Photo / 123RF

The New Zealand dollar was range-bound after quickly shrugging off better-than-expected labour data which pre-dated the government's closure of much of the economy to stem the spread of coronavirus.

The kiwi was trading at 60.54 US cents at 5pm in Wellington from 60.66 cents at the same time yesterday. The trade-weighted index was unchanged at 68.54.

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The data showed the unemployment rate rose to 4.2 per cent in the March quarter from 4 per cent, less than the 4.4 per cent rate the market had expected. Employment grew 0.7 per cent when economists had forecast a small contraction – the nation's lockdown began just before midnight on March 25.

Imre Speizer, currency strategist at Westpac, said the market reacted positively for a few seconds and then just as quickly retraced.

"They realised this was very dated news and it's not relevant to the current situation," Speizer said.

"The trend for the kiwi in the last couple of days has been sideways."

His colleague, Westpac economist Michael Gordon, said it was always going to be difficult to draw a clear message from the data because "they were only ever going to capture, at most, a fraction of the impact of the Covid-19 pandemic.

"While the reports painted a moderately encouraging portrait of the economy's starting point, they give us little insight into how bad things could get in the coming months."

A reminder that the virus hasn't been quite stamped out in New Zealand yet came with the report of two new cases of infection today, following two days of no new infections. Another death took the local toll to 21. The woman who died was in her 60s and from the same Christchurch rest home at which 11 other people contracted the virus and died.

The New Zealand dollar was trading at 94.02 Australian cents from 93.96 cents at 5pm yesterday It was at 48.68 British pence from 48.64 pence, at 55.83 euro cents from 55.60 cents, at 64.39 yen from 64.67 yen and at 4.2918 Chinese yuan from 4.2841 yuan.

The bid price on the two-year swap rate closed at 0.2050 per cent from 0.1830 per cent yesterday and 10-year swaps were at 0.7525 per cent from 0.6930 per cent.